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The Obama plan both builds upon and improves our current insurance system, upon which most Americans continue to rely, and leaves Medicare intact for older and disabled Americans. The Obama plan also addresses the large gaps in coverage that leave 45 million Americans uninsured. Specifically, the Obama plan will: (1) establish a new public insurance program available to Americans who neither qualify for Medicaid or SCHIP nor have access to insurance through their employers, as well as to small businesses that want to offer insurance to their employees; (2) make available the National Health Insurance Exchange to help Americans and businesses that want to purchase private health insurance directly; (3) require all employers to contribute towards health coverage for their employees; (4) mandate all children have health care coverage; (5) expand Medicaid and SCHIP to cover more of the least well-off among us; and (6) allow state flexibility for state health reform plans.

Via the PCCC; you can contribute to the
continuing ad campaign at their ActBlue site.

Thus, Obama specifically campaigned for what is now called the “public option” – and it wasn’t just the 8th of 11 bullet points in some forgotten speech in Cornstalk, Iowa, it was the very first specific element of his official health care plan. It was positions like this one that helped convince me, after Edwards’s exit, that the health care issue was at least a rough tossup between Clinton and Obama in the primaries, and helped convince me that Obama was worth working for in the general election campaign. I don’t seem to be the only one, judging by the Progressive Change Campaign Committee’s (PCCC) yeswestillcan.org site, which placed the ad to the right in the New York Times on Tuesday.

But the “public option” was a disposable afterthought — merely an “additional step we can take” — in Obama’s speech to Congress on Wednesday evening. Even after noting that a majority of Americans “still” favor the idea, Obama continued:

But its impact shouldn’t be exaggerated — by the left or the right or the media. It is only one part of my plan, and shouldn’t be used as a handy excuse for the usual Washington ideological battles. To my progressive friends, I would remind you that for decades, the driving idea behind reform has been to end insurance company abuses and make coverage available for those without it. The public option — the public option is only a means to that end – and we should remain open to other ideas that accomplish our ultimate goal. …

Wrong. Having eschewed a single payer model for health care insurance, the public option is utterly necessary for meaningful health care reform. The separate “Health Insurance Exchange” market that Obama and writers like Ezra Klein put much of their faith in will only be as good for Americans as the best insurance provider within that risk-pooling and -adjusting exchange — not just in co-pays and premiums, but in accessibility and service. Without a public option, the profit motive and shareholder pressures all but guarantee that private insurors will see such an exchange as just another regulatory framework to game — either by “innovatively” colluding and signaling industry-wide higher fees and premiums than necessary to eachother, by “innovatively” finding ways to cherrypick the healthiest clients within the exchange without appearing to do so, or both.

In my view, a public health insurance exchange option — a transparent, non-profit “control group”, if you will, for the novel health insurance market that is the Health Insurance Exchange — is absolutely necessary for this system to work in the public interest.

Obama isn’t just risking a bad policy , though, by signaling that he’s willing to throw the public option off the sled. He’d also be making a bad political choice as well.

That’s not just because of caving in to Blue Dogs who rode in on his coattails and Republicans like Grassley who’ve been bargaining in bad faith. (Although that’s a good enough indicator it’s a bad decision.) Much more importantly, abandoning the public option may also turn out to be a fundamental political mistake with voters. Not only do they “still” — Obama’s curious turn of phrase — support it, but as Paul Krugman points out “…everything I see says that there will be a major backlash against the idea of forcing people to buy insurance from the existing companies. That backlash was part of what got Obama the nomination! Having the public option offers a defense against that backlash.”

Obama went out of his way to describe the public option as no threat to any health insurance profiteers: “it would not impact those of you who already have insurance. In fact, based on Congressional Budget Office estimates, we believe that less than 5 percent of Americans would sign up”). As Ezra Klein (who actually joins Obama in being willing to trade public option for votes) put it, “In other words, there’s no reason to worry about the public plan: It won’t really work and very few people will be allowed to use it.”

Thus, the public option is in danger of vanishing altogether, either via a “trigger” that (as Timothy Noah points out in Slate) experience shows will never, ever get pulled, or via the “co-op” notion that will either be too small to work or too attractive not to get gobbled up by regional competitors. The public option should have been something one could voluntarily opt in to. Instead, it’s been pruned back again and again — a compromise with a compromise with a compromise — to be a temporary insuror of last resort.

For my part, I’m watching and I’m waiting. Groups like PCCC are fine and necessary; an “inside-outside” strategy of pressuring and rewarding Democratic incumbents always makes a certain amount of sense for a pressing issue.

The danger is that we’re kidding ourselves, and in so doing take ourselves ever less seriously in these political fights. We’ve been implored to take other issues and approaches off the table to get to a “progressive place,” in Speaker Pelosi’s memorably lackluster phrase back in 2007. Meaningful, structural health care reform was the prize our eyes were on, the brass ring establishment Democrats have asked us to wait for for years. The outlines of what we’re getting instead looks more like an aluminum pull tab to me.

=====RALLY ON SUNDAY ON THE CAPITOL GROUNDS: Americans United for Health Care and Insurance Reform are holding a rally for the public option this Sunday, September 13, from 12-5pm at the “Upper Senate Park,” near the Russell Senate Office Building at Constitution and Delaware (map).
PUBLIC OPTION: For a collection of various articles about the “public option,” click here.

UPDATE, 9/13: Over at Real News Network, two very good discussions by progressive advocates David Swanson (afterdowningstreet) and Anthony Wright (Health Access California) about the politics and strategy of all this. Swanson noted, among other things, the damage done by taking single payer off the table; Wright’s perspective was that he really wants a public option, but doesn’t minimize the value of the rest of the package. (Wright makes a better point than mine about regional coops — they’re potentially a “race to the bottom” to find — or lobby for — the least restrictive state regulations in a given region.) I feel like I was seeing a preview of two leaders for the years ahead. See also Gordon Clark: “After the cheering subsides, what was actually in Obama’s speech?“

It’s not just because more than two thirds of the American people want a single payer health care system. And if they cant have a single payer system 77% of all Americans want a strong government-run public option on day one (86% of democrats, 75% of independents, and 72% republicans). Basically everyone. [...]

…the PUBLIC OPTION will give you someplace safe to go. And it will give us someplace safe to take you. The public option will be your refugium (your refuge). Where the wolves cannot get at you when your down, hurting, and vulnerable. Where everyone who needs it can find rest, security, comfort and the care they need. Protected by the BIG GUNS of We The People Of The United States. THE MOST POWERFUL PEOPLE AND COUNTRY ON EARTH.

This is why it is so critical that we do not lead another 50 million vulnerable, uninsured Americans into the forest of the wolves, without the protections of a Strong Government-run public option. We The People Of The United States MUST NOT LET THAT HAPPEN to any more of our fellow Americans. If healthcare reform does not contain a strong public option on day one. YOU MUST! KILL IT. Or you will do far more harm than good. And millions more will die needlessly. Rich, middle class, and poor a like. NO INDIVIDUAL MANDATES! without a Strong public option on day one.

To those who would continue to obstruct good and true healthcare reform for the American people, and who seek to trap millions more vulnerable Americans in the forest of the wolves. We will continue to fight you. We are prepared to wage all out war against you, and will eagerly DESTROY! you. Time…is…UP! YOU HAVE BEEN WARNED! No Co-op’s! No Triggers!

[because of its length, I've edited this comment and moved the entire original comment here -- Thomas Nephew]

I’m afraid I did spit a few nails over at Ezra Klein’s blog about this, though. I think Klein and Obama both have this notion that they’ve thought it all through and they’ve corralled private insurance well enough with the Health Insurance Exchange (HIE) and the various regulations. If so, they’re guilty of pundit/wonk hubris on that score; come what may, insurance companies will always, always, always switch on their data mining engines, their lawyers, and their work force to find new ways to carve a buck out of their customers and/or collude to undermine the HIE, no matter what market Obama and Klein set up.

So I’m a little upset with Klein for adding his voice to the “public option is no big deal” crowd. Klein (and perhaps Obama/Emanuel et al) adds the proviso “just make the GOP pay a good price for it.” But that’s terrible negotiating: if Klein or Obama value the public option at “no big deal” levels, so will the GOP.

Agreed, very nice post. I particularly like the “aluminum pull tab,” very apt.

No doubt Obama and the Dems in Congress, who have taken (and continue to take) millions from the insurance and drug industries, can convince themselves that the public option doesn’t matter. As we used to say about people justifying their work on horrible weapons systems, it’s amazing what you can believe when your salary depends on it.

If you heard today, Olympia Snowe, the only Republican Senator willing to vote for any health care (and why Obama still cares about that…?) has said the public option has to go. So that what something like 72 hours after Obama announced that was expendable? Perhaps Dems figure they can always use the “well who are you going to vote for, Republicans?” Of course, that’s exactly what a lot of people will do – I wouldn’t be surprised at this point if they take back the House in 2010. (Significant Dem losses are already expected.)

Bill Maher made a very wise comment this week: Americans don’t care what you believe, they care about how much you believe it. Republicans might be lunatics, but at least they fight for what they believe in.

p.s. – the “Yes We Still Can” ad was organized by Steve Hildebrand, a top campaign organizer for Obama whose “disaffection” was whipped into a frenzy by the mainstream media. I saw him interviewed after Obama’s speech, and the guy was totally mollified, actually said that he would “always be in the fold” when it came to Obama.

If you really do believe in single payer or the public option, I would not be giving money to their ad campaign

@Jacksmith: thanks for your comment, which I just noticed in my blog’s comment spam filter. I agree with what you say. I think your comment ran afoul of the filter because of (1) its length and (2) the number of links in it. As noted above, I edited the comment for length and moved a copy of the original comment to a separate web page.

@Gordon: thanks very much for your comments as well! I’ll have to remember that Maher line. Re Hildebrand, here’s a link about his post-speech change of tone that backs up what you said (not that I doubted it.) However, its my impression that while Hildebrand may have been a leader in getting people to sign up for this ad, he’s not necessarily a leader of PCCC/Bold Progressivesper se, so they may not back off just because he does. Here’s a January ’09 HuffPo article about PCCC; Hildebrand isn’t mentioned. At any rate, PCCC appears to continue fundraising around the health care issue, and are now targeting Max Baucus with TV ads in Montana.

I think a good compromise would be a plan with a trigger for private co-ops if the health insurance companies hire Blackwater to round up and kill more than (say) 15% of their highest-risk customers over the next five years. In exchange, the Democrats would agree to an insurance mandate that would make it a felony not to carry health insurance at prices determined by a “National Health Insurance Board” comprised of representatives selected by the 10 largest private health insurers. The 15% and 10 numbers are just starting points — the details can be worked out by the so-called Gang Of Six. This is a plan that I think actually has a chance of attracting Republican support, along with centrist Democrats like Baucus and Kent Conrad.

The heck with the public option, let’s do the Blackwater option! It’s political genius: we can rebuild support for health care reform around a solid political core of teabaggers and mercenaries. And letting the Gang of 6 “work out the details” shows you’ve learned from Clinton’s failed health care reform efforts.

I did my nail-spitting at Klein’s blog early, back in March when he did an incoherent series of posts that effectively ditched the public option. When he expressed surprise about Dean’s kickoff of the DFA campaign focused on winning it, I just lost it in comments:

Considering EK was one of the main people making the case that public pool was the way to preserve a path to single payer in a crappy, insurer-friendly “reform”, the willingness to abandon the position because of a desire to distance himself from DFH Howard Dean is an impressive package of arrogance, sellout, _and_ political cluelessness all wrapped up with a ribbon of self-satisfied centrism.

That’s when it became inescapably clear that the whole HCAN effort was, from the point of view of the WH, just a way to de-mobilize single payer pressure — and a handy mechanism to bring liberal lambs quietly along to the slaughter. There was never any serious respect for the public option as an essential part of a political deal with mandates to buy private insurance — it was and is just a bargaining chip.

The AFL-CIO’s endorsement of single-payer at the convention is, whether intended that way or not, a signal that the half-assed reform that gets through this Congress won’t end the fight — and a recognition of the probability that progressives will, in fact, end up caving on the public option. I’m a real ray of sunshine, I know…